SMWD staff to get raises, help fund retirements

RANCHO SANTA MARGARITA – Following lengthy negotiations, Santa Margarita Water District employees will receive raises of at least 2 percent to 4 percent annually for the next four years in exchange for agreeing to help fund their retirements for the first time.

“Not everybody got everything they wanted,” said Dan Ferons, general manager of Orange County’s second-largest water district, “but I do think it’s a major milestone for us.”

Per the memorandum of understanding unanimously approved during Wednesday’s board meeting, workers will start picking up a portion of the 8 percent employee member contribution to California Public Employees’ Retirement System. They’ll pay 3 percent of their salaries this year, 6 percent in 2014 and, by July 2015, employees will be paying the entire employee contribution.

The district has been bearing that cost along with the employer contribution to CalPERS. Shifting the employee contribution to staff will save SMWD $75,000 in the first year, Ferons said, while also helping the district chip away at unfunded pension liabilities that plague many public agencies.

After several years of short-term agreements, leaders also celebrated the stability this MOU brings, running from Sept. 1 to June 30, 2017.

Director Betty Olson and Chair Saundra Jacobs expressed concern, though, over perks employees received and disparity with the private sector.

Salary and benefits costs have jumped from $7.9 million in 2002 to more than $15 million this year, Olson pointed out, while inflation would’ve only taken that number to $10 million.

In 2011 – the most recent year reported to the State Controller’s Office – the average SMWD employee made $72,681 while 21 staffers received salaries of $100,000 and up.

“I think we all need to be thinking about this very carefully going forward,” Olson said.

The new agreement gives employees a 3 percent cost of living allowance this year, along with a 1 percent merit increase.

Employees will receive another 3 percent COLA in 2014, 2 percent in 2015 and between 2 percent and 3 percent in 2016. Each year, they’ll also be eligible for merit-based raises of 2.5 percent to 5 percent, depending on performance evaluations.

Employees received a 3 percent cost of living raise in 2012. They haven’t received a merit raise since 2011.

Members of the Santa Margarita Water District Employees Association voted Tuesday night to approve the MOU on a 65-24 vote. President Kristi Varney was reached for comment but said she wasn’t available to talk.

As with the prior MOU, employees are guaranteed 10 1/2 paid holidays each year, plus from 12 to 22 hours of leave time each month. Leave can accumulate up to 400 hours, depending on years of service. And once workers have 176 hours on the books, they can sell time back to the district.

Other perks include up to $150 each month for extra certifications, $500 yearly stipends for required uniforms, 10 percent pay bumps for working weekend shifts and an extra $500 per week for being on standby duty.

The MOU prohibits employees from striking, picketing or staging lockouts.

SMWD doesn’t offer lifetime medical benefits to employees, as some public agencies do, and it doesn’t pay retirement or medical benefits for board members.

“It’s really a fair structure,” district spokeswoman Michele Miller said, emphasizing the education and certification required for many SMWD employees. “You want to maintain good employees and attract good employees.”

The new MOU will increase the district’s budget by 2.4 percent this year and by 2.7 percent for each of the next three years, Ferons said. Salary and benefits account for 26 percent of the district’s 2013-14 budget.